Hess Reports Another Nice Well: 100K In Six Months -- December 1, 2020

Breaking: US Senate confirms Trump's FERC picks. 

Active rigs:

$44.40	12/1/2020	12/01/2019	12/01/2018	12/01/2017	12/01/2016
Active Rigs	14	57	66	54	39

One well coming off the confidential list -- Tuesday, December 1:

• 29469, drl/A, Hess, TI-Beauty Valley-158-95-1423H-3, Tioga, t--; cum 95K 9/20

RBN Energy: top-tier crude oil-focused producers mergein new upstream consolidation wave.

It’s no surprise that the onset of the COVID-19 pandemic early this year shut down upstream mergers & acquisition (M&A) activity, just as it did America’s corporate offices, restaurants, entertainment venues, and schools. U.S. M&A deal flow slowed to a trickle in the first half of 2020 as companies’ valuations dropped along with bid prices and E&P executives struggled to realign expenditures with dwindling cash flows. But, as we’ve seen in the past, energy-commodity price crashes eventually spur a resurgence in M&A activity. The dam finally broke in late July, when Chevron announced a $13 billion takeover of Noble Energy, followed in short order by other, major corporate consolidations that brought the deal value total for the last five months to nearly $50 billion. This time was different in one important way, though: Instead of the strong preying on the weak, the strong merged with the strong in low-premium, all-stock transactions. Today, we analyze this new paradigm and delve into the details of the high-value deals.

First, some perspective on the history of upstream-sector M&A. Since the breakup of Standard Oil’s monopoly over a century ago, the oil industry has evolved in response to changing price environments. From their common ancestor, the Seven Sisters continued to dominate the oil patch. Today’s major integrated companies and large, independent E&Ps were generally formed in three waves of consolidation that followed major price crashes. The first was in the early to mid-1980s, when oil prices began to fall from the peak in those days near $40/bbl. The pieces that were to become today’s super-majors began to come together with the mergers of Phillips Petroleum/General American, Standard Oil (CA)/Gulf Oil, Texaco/Getty Oil, Mobil/Superior Oil, Royal Dutch/Shell Oil, and BP/Standard Oil (OH). The second oil price plunge in the late 1990s led to the merger wave that largely finished the process of forming the industry’s giants, with BP grabbing ARCO and Amoco, Exxon merging with Mobil, Total acquiring PetroFina and Elf Acquitaine, and Chevron buying Texaco. Large E&Ps followed suit in the early 2000s, as Anadarko bought Union Pacific Resources and Kerr-McGee, Devon snatched Mitchell Energy and Ocean Energy, Alberta Energy and Pan Canadian merged to form Encana (now Ovintiv), ConocoPhillips purchased Burlington Resources, and Pioneer Natural Resources nabbed Evergreen Resources.